Counterfactuals are thoughts of what might have been, of what could have occurred in the past if only some detail or action were altered. These thoughts influence a range of emotions, cognitions, and behavior, are closely related to rumination, and have recently been found to be associated with depression and schizophrenia. The previous grant tested a Two-Stage Motivational Model (2SM) of counterfactual thinking and generated several important findings. A revision to this theory, the goal inference perspective, is tested in the present application. This goal inference perspective argues that counterfactuals are for the most part goal-directed and a component of behavior regulation, suggesting that nearly all previously identified determinants of counterfactual thinking exert their effects by way of alteration to goal inferences. Aim 1 of this application is to test the main propositions of this perspective, for example that counterfactuals in and of themselves activate goal inferences, and that negative affect activates counterfactual thinking with mediation by goal progress inferences. Aim 2 is to follow-up two key discoveries from the previous funding period that have particular implications for this goal inference perspective: a domain-specific sex difference in counterfactual thinking that is best understood using regulatory focus theory, and impoverished counterfactual thinking in schizophrenia patients. Aim 3 is to draw theoretical connections to other kinds of comparative judgment, social and temporal comparison, using the insights of this goal inference perspective. The overall objective is to forge a new and comprehensive theoretical specification of counterfactual thinking. [unreadable] [unreadable]